Suppose the median weekly earnings for recent college graduates in a large city by quarter for the years 2008 to 2015 are as follows:

Quarter Median Weekly Earnings Quarter Median Weekly Earnings Qtr 1 2008 816 Qtr 1 2012 947.2 Qtr 2 2008 816 Qtr 2 2012 961.6 Qtr 3 2008 835.2 Qtr 3 2012 963.2 Qtr 4 2008 836.8 Qtr 4 2012 964.8 Qtr 1 2009 852.8 Qtr 1 2013 976 Qtr 2 2009 865.6 Qtr 2 2013 972.8 Qtr 3 2009 864 Qtr 3 2013 984 Qtr 4 2009 889.6 Qtr 4 2013 982.4 Qtr 1 2010 908.8 Qtr 1 2014 998.4 Qtr 2 2010 894.4 Qtr 2 2014 990.4 Qtr 3 2010 912 Qtr 3 2014 1006.4 Qtr 4 2010 921.6 Qtr 4 2014 1020.8 Qtr 1 2011 929.6 Qtr 1 2015 1033.6 Qtr 2 2011 931.2 Qtr 2 2015 1016 Qtr 3 2011 936 Qtr 3 2015 1046.4 Qtr 4 2011 940.8 Qtr 4 2015 1038.4

a. Prepare a line chart of the median earnings by quarter.

b. Estimate a linear trend line for this set of data.

c. Produce a forecast for each quarter using the linear trend line you estimated in part b.

d. Calculate the error for each period.

e. Calculate the Durbin-Watson statistic and test for positive autocorrelation. Use a level of significance of 0.05.

Computer Software Exercises